Australia’s GDP growth slows due to climate change

UNITED STATES (OBSERVATORY NEWS) — The head of the Reserve Bank of Australia, Philip Low, warned of the massive economic and financial consequences of climate change, Bloomberg reports.

Australia, the driest continent in the world, experiences forest fires every year, but this year its scale has been extraordinary.

“The economic consequences are very large,” Lowe said at a forum in Melbourne. “The world is getting hotter, the climate is more variable, and we can already see in Australia, perhaps more than anywhere else in the world, the consequences of this.”

According to the head of the central bank, drought will reduce Australia’s GDP growth by a quarter percentage point this year, and fires will reduce growth by 0.2 percentage points in the last quarter of 2019 and this quarter.

“Climate change affects the nature of production in Australia, the nature of investments, and ultimately the nature of our exports, at the moment I think it affects people’s confidence and, consequently, ultimately costs,” Lowe said.

“It affects the availability and cost of insurance, these extreme weather events, and it affects how we generate and distribute energy,” he added.

Natural disasters have caused record economic losses over the past decade. According to Aon insurance broker, in 2010-2019 the damage from natural disasters around the world amounted to 2.98 trillion dollars, which is about 1.19 trillion more than in the previous decade.


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